Many of the solutions proposed to deal with the coronavirus crisis and the economic fallout of the lockdown to contain it are extremely hard to implement. But there is one very easy thing that the Union government can do right now to alleviate the hunger of millions of Indians: release food stocks to the states right now for free.
The Pradhan Mantri Garib Kalyan Yojana, a financial package announced by Finance Minister Nirmala Sitharaman after the lockdown had begun in March, included some provisions intended to address the fact that hundreds of millions would go hungry without work. But the package has huge gaps.
One calculation finds that the Public Distribution System, through which authorities disperses food to citizens, excludes more than 100 million people – who are otherwise legally mandated to be within the system. The reason is technical: “Because the Central government insists on using the 2011 census population figures to calculate state-wise coverage.” But the effect is very real.
These people excluded from the public distribution system, as well as those who simply do not have ration cards or are registered in states other than the one in which they are now living, means that even as the government attempts to prevent the spread of a deadly virus that has taken thousands of lives globally, the spectre of starvation looms large over India’s needy.
But this is not a famine situation. Far from having a shortage, the Indian government is actually overflowing with food supplies. The foodgrain stocks of the Food Corporation of India this year stands at 77 million tonnes, compared to the required emergency stock of, on average, 22 million tonnes. The new crop, itself a bumper one, is about to come in.
This means the Centre need not be worried about running out of food. What may be on the mind of the finance minister and bureaucrats is an accounting problem. Economist Jean Drèze has pointed out that the food subsidy payments show up on the Centre’s books only when stocks are distributed. This acts as a disincentive for a government that knows how hard it will be to balance the budget this year.
But accounting problems should not stand in the way of real-life ones. Indians need food and they need it now. Extra food stocks should be released for free.
Charging the states for the food will only act as an impediment, since they too are running out of funds never mind the tens of thousands of crores that the Centre already owes them.
The stocks need not go to the states unconditionally. The Centre could insist that states use the extra foodgrain either to universalise rations – as Chhattisgarh has already done, distributing food even to those without ration cards – or to run community kitchens that are open to everyone.
Three prominent economists, Amartya Sen, Raghuram Rajan and Abhijit Banerjee, wrote this week that the government should not, at this time, be worried about potential leakages in the public distribution system. The priority should be to ensure that food gets to the absolutely needy.
“The correct response is to issue temporary ration cards – perhaps for six months – with minimal checks to everyone who wants one and is willing to stand in line to collect their card and their monthly allocations,” wrote the economists. “The cost of missing many of those who are in dire need vastly exceeds the social cost of letting in some who could perhaps do without it.”
There will be many tough decisions for the government to take as it evaluates how India should exit from the lockdown and how it can raise and spend the money to get the econonomy back on track. Admittedly those problems are extremely complex with no clear answers.
But here the Centre has a simple fix for an immediate concern – and it should take full advantage of that by releasing food grains to the states right away.